Mr Dixon says Australia needs to accept the high value of the dollar and find innovative ways of stimulating the country's largest services export industry.

"While there's still a lot of work to be done, I believe Australian tourism is getting its mojo back, with growth rates getting closer to the halcyon days of the 1980s and 1990s," he said at a business event for the Committee for the Economic Development of Australia.

"Rewards for getting this right are enormous for our economic wellbeing in general, for enabling us and our neighbours to better understand and interact with each other, and for the future employment prospects of hundreds of thousands of young Australians."

Mr Dixon said 100,000 new jobs would need to be created if the industry was to reach its growth targets by 2020.

"(There's) need for greater flexibility in the labour market and need for innovation around immigration policies," he said.

Due to a growing Asian middle class and rebounding British, American, and Canadian tourism markets, Mr Dixon said it was crucial that government worked with the tourism industry to build appropriate infrastructure, beginning with Sydney airport.

"I do believe the situation in Sydney is bizarre, for want of a better word," he said.

"The current airport is nowhere near operating to its full potential."

He said infrastructure spending should focus on access, as that was the problem.

"If not, there's got to be a decision made very quickly to build another airport," he said.

In a rare move these days, Mr Dixon also found himself agreeing with his former friend, Qantas boss Alan Joyce, on the subject of the strong Australian dollar.

The pair's once-close relationship has come under a cloud in recent months after Mr Joyce ended the airline's partnership with Tourism Australia amid allegations of Mr Dixon's conflict of interest as an investor in a consortium which bought a stake in Qantas.

"Alan Joyce said last week that the value of the dollar was the new norm and that we as a country have to come to terms with that fact," Mr Dixon said.

"I totally agree with Alan, which might surprise people at times, but certainly as an industry tourism needs to move on and deal with the situation as it is, not as it was.

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